A wave of innovation has swept through the world of philanthropy in recent years; foundations and NGOs alike have been implementing new models, approaches, and technologies. But pull mechanisms—financial incentives that trigger donor payments when specific outcomes are achieved—remain surprisingly underutilized. Unlike grants (or push mechanisms), they are paid out after results are realized, allowing donors to reward the entities that actually produce the desired outcome.

Both grants and incentives can be effective if deployed in the right circumstances. But donors should consider expanding their use of pull mechanisms where possible.